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Despite the ongoing oil production cuts across OPEC, Kuwait has announced plans to expand its oil and oil product tanker fleet twofold over the next 20 years to 60 vessels, the chief executive of Kuwait Petroleum Corp, Nizar al-Adsani said as quoted by S&P Platts today.
The move is the latest indication that in spite of hints, the production cuts may not be in the long-term plans of all members. Several OPEC producers have production expansion plans on their agendas, most notably Iraq, OPEC’s number-two, and now Kuwait.
Currently, Kuwait has 28 tankers at its disposal, of which 12 are for crude oil, 10 are for oil products, and four are LPG carriers. The remaining four are bunkering tankers. Yet, "To service KPC's international marketing trade requirements, we will expand our fleet, especially for product carriers," al-Adsani said at the Middle East Petroleum and Gas event in Abu Dhabi.
KPC will buy two more oil tankers in the next three years and another four by 2040, the CEO said, along with 11 more oil product vessels and one more LPG carrier.
By the same year, Kuwait plans to expand its oil production capacity to 4.75 million bpd from the current 3.2 million bpd, which will take some US$400 billion in new investment. Before that, however, by 2020, Kuwait plans to ramp up its production capacity to 4 million bpd.
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Refining capacity will also grow, from 936,000 bpd at the moment to 2 million bpd by 2035.
At the same time, the Kuwaiti energy minister earlier this month signaled an extension of the production cuts might be what the future holds, which could interfere with the country’s expansion plans unless it is counting on troubled Venezuela’s fast-falling output.
“In June, we will have a chance to meet and review the agreement,” the minister said, as quoted by Bloomberg last week. “Market situations will determine if there will be a permanent agreement between OPEC and independent producers to enforce market stability.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.